Trade

Home to roughly 19% of the world’s population but only 7% of the world’s arable land, China must rely on imports to bridge its food production gap. Additionally, recurrent food safety scandals, worsening farmland pollution, and growing consumer preference of quality over price ensure that imported food products will become increasingly frequent on Chinese dinner tables going forward. ChinaAg is here to provide accurate and current Chinese import market information. Whether it’s determining key import markets within China, identifying consumer product preferences, or understanding import seasonality,

Case Study - Soybeans

Soybeans represent China’s largest agricultural import by value, well ahead of cotton, timber, rubber, and palm oil. From 2009 to 2011, China’s soybean imports consistently comprised over 50 percent of the world’s soybean purchases by volume. In 2012 and 2013, China’s soybean imports by volume increased to over 60 percent of the world’s purchases, well ahead of Germany, the Netherlands, and Mexico (each comprised approximately 3.6 percent of global imports by volume in 2013). Not only are soybeans China’s largest agricultural import, China dominates the global soybean trade and can affect international soybean prices with purchase agreements and/or cancellations. Major Chinese soybean purchasers include Yihai Kerry (Wilmar International), Cargill Investment (China) Ltd., and China National Cereals, Oils and Foodstuffs Corp (COFCO).

Chinese soybean imports from Brazil and Argentina are noteworthy, as soybeans and soybean oil account for the majority of agricultural trade between China and these two South American countries. In fact, in 2013, Brazil exported more soybeans to China than the U.S.

Within China, soybeans are typically processed into soybean meal for animal feed and cooking oil for human consumption. Soybean meal is typically used to feed to livestock and fish, while the oil is the nation’s largest source of cooking oil. China’s domestically grown soybeans (e.g. non-genetically modified soy) are mainly used to make tofu and soy sauce.

Key dates in the U.S.-China soybean trade partnership

1982: American Soybean Association (ASA) opens an office in Beijing. During the same year, China’s largest grain trader, China National Cereals, Oil and Foodstuffs Corp (COFCO), establishes a subsidiary in the U.S.

1985: Xi Jinping (age 31), led a small Chinese delegation from Hebei province to study American agriculture. During a three day visit to the town of Muscatine (pop. 23,000), eastern Iowa (Iowa and Illinois are the U.S.’s top soybean producing states). Due to the delegation’s limited budget he stayed with a local family. In 2012, he revisited Muscatine, stating “coming here is really like coming back home.” At an official dinner in Des Moines, the governor of Iowa toasted Xi saying “Iowa farmers are proud to harvest safe and reliable agricultural products for use by the people of China.” During the visit, U.S. companies Cargill Inc. and the Archer-Daniels-Midland Co. signed contracts to export $4.3 billion worth of soybeans to China.

2001: China joins the World Trade Organization, the U.S. negotiates a 3 percent across-the-board tariff for soybean imports (seen as a success for U.S. soybean growers).